3a) What is new product development strategy? As a product manager, discuss the various steps that you would consider in the development process of a new product.
New product development strategy:
In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product or service to market. There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management used to maintain or grow their market share.
Development process of a New Product:
1. Idea Generation is often called the "fuzzy front end" of the NPD process
· Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features.
· Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step).
2. Idea Screening:
· The object is to eliminate unsound concepts prior to devoting resources to them.
· The screeners should ask several questions:
o Will the customer in the target market benefit from the product?
o What is the size and growth forecasts of the market segment/target market?
o What is the current or expected competitive pressure for the product idea?
o What are the industry sales and market trends the product idea is based on?
o Is it technically feasible to manufacture the product?
· Will the product be profitable when manufactured and delivered to the customer at the target price?
3. Concept Development and Testing
· Develop the marketing and engineering details
o Investigate intellectual property issues and search patent data bases
o Who is the target market and who is the decision maker in the purchasing process?
o What product features must the product incorporate?
o What benefits will the product provide?
o How will consumers react to the product?
o How will the product be produced most cost effectively?
o Prove feasibility through virtual computer aided rendering, and rapid prototyping
o What will it cost to produce it
· Testing the Concept by asking a sample of prospective customers what they think of the idea. Usually via Choice Modelling.
4. Business Analysis
· Estimate likely selling price based upon competition and customer feedback
· Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock equation
· Estimate profitability and breakeven point
5. Beta Testing and Market Testing
· Produce a physical prototype or mock-up
· Test the product (and its packaging) in typical usage situations
· Conduct focus group customer interviews or introduce at trade show
· Make adjustments where necessary
· Produce an initial run of the product and sell it in a test market area to determine customer acceptance
6. Technical Implementation
· New program initiation
· Finalize Quality management system
· Resource estimation
· Requirement publication
· Publish technical communications such as data sheets
· Engineering operations planning
· Department scheduling
· Supplier collaboration
· Logistics plan
· Resource plan publication
· Program review and monitoring
· Contingencies - what-if planning
7. Commercialization (often considered post-NPD)
· Launch the product
· Produce and place advertisements and other promotions
· Fill the distribution pipeline with product
· Critical path analysis is most useful at this stage
8. New Product Pricing
· Impact of new product on the entire product portfolio
· Value Analysis (internal & external)
· Competition and alternative competitive technologies
· Differing value segments (price, value, and need)
· Product Costs (fixed & variable)
· Forecast of unit volumes, revenue, and profit
These steps may be iterated as needed. Some steps may be eliminated. To reduce the time that the NPD process takes, many companies are completing several steps at the same time (referred to as concurrent engineering or time to market). Most industry leaders see new product development as a proactive process where resources are allocated to identify market changes and seize upon new product opportunities before they occur (in contrast to a reactive strategy in which nothing is done until problems occur or the competitor introduces an innovation). Many industry leaders see new product development as an ongoing process (referred to as continuous development) in which the entire organization is always looking for opportunities. For the more innovative products indicated on the diagram above, great amounts of uncertainty and change may exist, which makes it difficult or impossible to plan the complete project before starting it. In this case, a more flexible approach may be advisable.
Because the NPD process typically requires both engineering and marketing expertise, cross-functional teams are a common way of organizing projects. The team is responsible for all aspects of the project, from initial idea generation to final commercialization, and they usually report to senior management (often to a vice president or Program Manager). In those industries where products are technically complex, development research is typically expensive, and product life cycles are relatively short, strategic alliances among several organizations helps to spread the costs, provide access to a wider skill set, and speeds the overall process.
b) What are the considerations involved in designing a marketing organisation?
The considerations involved in designing a marketing organization
Step 1: Identifying and defining your Organisation.
If you are considering designing a marketing organisation , chances are you have already identified a problem and an ensuing informational need. Of the six steps in marketing research, this is always the first one. Your problem or issue will likely be recognized by one or more levels of management. Sometimes, further definition of the problem or issue is needed, and for that there are several tools you can use. For more information on step 1, see our resources page on the first of the marketing research steps.
Step 2: Developing your approach
Once your problem is better defined, you can move onto developing your approach. Generally speaking, your approach should be developed almost exclusively around a defined set of objectives. Clearer objectives developed in Step 1 will lend themselves to better approach development. Developing your approach should consist of an honest assessment of your team’s market research skills, establishing a budget, understanding your environment and its influencing factors, developing an analysis model, and formulating hypotheses. . For more information on step 2, see our resources page on the marketing research approach.
Step 3: Research design
Based upon a well-defined approach from Steps 1 & 2, a framework for the designing your marketing research program should be apparent. This step is the most encompassing of all steps in marketing research, requiring the greatest amount of thought, time and expertise — and is the point at which the less experienced will obtain assistance from an internal/external market research experts. Since the intelligence eventually gained from the research is so closely related to the selected research design, this is the single most important six steps in marketing research, and the step most vulnerable to the typical research errors. Research design includes incorporating knowledge from secondary information analysis, qualitative research, methodology selection, question measurement & scale selection, questionnaire design, sample design & size and determining data analysis to be used. For more information on step 3, see our resources page on marketing research design.
Step 4: Collecting the data
Often called data collection or survey fielding, this is the point at which the finalized questionnaire (survey instrument) is used in gathering information among the chosen sample segments. There are a variety of data collection methodologies to consider. For more information on step 4, see our resources page on marketing research data collection.
Step 5: Performing data analysis
All analysis that can be performed, from complex to simple, depends on how the questionnaire was constructed. Less complex analysis on smaller data sets can be handled with any of a number of office suite tools, while more complex analysis and larger data sets require dedicated market research analysis software. Types of analysis that might be performed are simple frequency distributions, cross tab analysis, multiple regression (driver analysis), cluster analysis, factor analysis, perceptual mapping (multidimensional scaling), structural equation modeling and data mining. For more information on step 5, see our marketing research resources page on survey data analysis.
Step 6: Reporting and presentation
Reporting and presentation, if not the most important of the steps in marketing research, is easily the second behind research design. All business critical information and knowledge that comes from your market research investment are limited by how they are presented to decision makers. There are as many reporting styles as there are research reports, but some are definitely better than others, and there are definitely trends to be aware of. For more information on step 6, see our resources page on marketing research reports.
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